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21 May 2018 1
Finnish Industrial Days in Singapore - Cargotec - October 31st
08.30 Welcome & opening Michel van Roozendaal, President, MacGregor
08.35 Peter Cederholm, President, Bromma
09.30 Transportation from Cargotec’s office to PSA port
10.00-11.30 PSA visit
11.30 Back to Cargotec office, transportation provided
12.00 Lunch and second presentation by Michel van Roozendaal, President, MacGregor
14.00 End of the event
Cargotec optimises global cargo flows to create sustainable
customer value and a better everyday
Sales:
EUR 3,250 million
EBIT: 8.0%
Strengths we are building upon
Sales split: new
equipment vs service
and software
Cargotec - strong global player with a well-balanced business
Sales by
geographical area
Sales by
business areas
Kalmar
49%
Hiab
33%
MacGregor
18% AMER
32%
EMEA
44%
APAC
24%
Service and
software
33%
New equipment
67%
Figures: 2017
EBIT % excluding restructuring costs
Leading market positions
in all segmentsStrong brands Loyal customers Leading in technology
Kalmar
Sales: EUR 1,598 million
EBIT: 8.3% (EUR 133.1 million)
Hiab
Sales: EUR 1,084 million
EBIT: 14.5% (EUR 157.2 million)
MacGregor
Sales: EUR 571 million
EBIT: 1.9% (EUR 10.6 million)
Figures have been restated according to IFRS 15 and are calculated by using the new definitions
for the equipment, service and software businesses announced in March 2018
Bromma –clear market
leader in spreaders
Contents
1. Bromma in brief
2. Brand
3. Market and Business Drivers
4. Geographical Order Distribution
2018 YTD
5. Competitive landscape
6. Strategic focus areas
Bromma in Brief
▪ Close to 10% of Kalmar total revenue
▪ Double digit EBIT margins
▪ Optimizing crane availability through
innovative high quality products
▪ Spreaders and related services for
port cranes and mobile equipment
Our Market consists of seaports and large riverports
The spreader might appear to be a relatively minor investment for a
terminal. In terms of initial investment cost, it probably is.
However, in the long run, the choice of spreader provider is a key
to develop and maintain a high level of terminal productivity.
If the spreader doesn’t work, the ship won’t sail.
Complete Spreader Portfolio
Ship-To-Shore Yard
Mobile Harbor Crane Mobile Equipment
Volume
STS
Yard
MHC
MEQ
Value
STS
Yard
MHC
MEQ
▪ The most recognized and well-reputed brand in the
spreader market
– Quality (design, production and material)
– Innovation
– Environmental leadership
– Swedish brand
▪ Market leading position
– ~50% market share for crane spreaders
– ~1/3 of world market of mobile equipment spreaders
Brand and Market Share
10
Customer needs and
expectations in 2021
Customer
Uptime / Productivity / Equipment
reliability
Reduced costly downtime caused by
equipment breakdown (~30%-50% of
quay crane breakdowns is spreader
related)
Improved productivity, thus less effect
on vessel turnaround time
Safety
Injuries and fatalities to be avoided
Address risk of falling hazards from
spreaders
Trusted partner
Deep long-term relationships
Trust-based partnerships
Environment
Environment hazards such as oil
spillage, emission of CO2 addressed
Reduced power consumption
12
Global capacity increase drives our market
0
20,000
40,000
60,000
80,000
100,000
120,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
(TEU)(TEU)
Capacity increase
Throughput
Capacity
Source: Drewry - ARGCTO 2018
1. Annual capacity
addition
2. Replacement of
spreaders
purchased 12-15
years ago
13
Replacement market is smoothening out cycles
0
20,000
40,000
60,000
80,000
100,000
120,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(TEU)Capacity increase
1
2
▪ Increasing share of direct Terminal
Operator orders
▪ Intensified customer interaction
▪ Equipment replacement, upgrade
or refurbishment
Replacement share of total market is growing
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2010 2012 2015 2017 2018(YTD)
Order Channel Distribution
Direct OEM
Bromma is to significantly improve our marketposition in APAC while sustaining our
leading positions in EMEA and AMERICAS.
Global reach with strong local presenceOrders Received Jan-Sep 2018 (excl MHC OEM)
Competitors
ZPMC
Our biggest customer!
China based
RAM
Singapore based / China production
Innovation challenger
Stinis
Holland based / NL &
Malaysia production
Different spreader design
Strategic Focus Areas
▪ Continue to strengthen our market position in APAC and Greater
China
▪ Sustain our strong position in Americas and EMEA
▪ Capture the spreader replacement market
▪ Develop digital solutions and services around the core products
▪ Secure Bromma’s connectivity in the digitalized ”systems-of-
systems”
▪ Clear Market Leader in Spreaders
▪ Strong Brand built on Innovation and Quality
▪ Global reach with a strong local presence
▪ The Spreader - Key in the logistic flow
▪ Strategic intention to grow in APAC
▪ The Replacement market requires and enables a more intensified
customer interaction
Summary
MacGregor - the leader in intelligent cargo and load handling
Michel van Roozendaal, President
Contents
MacGregor in brief and recent progress
Strategic focus 2019 - 2021
Strengthening presence in Asia
M&A activity update
21 May 2018MacGregor, Helsinki 22
MacGregor in brief and recent progress
A leader in all maritime segments
Merchant
Cargo Flow
Marine
People Flow
Offshore
Energy
Marine Resources
& Structures
Naval Logistics
and Operations
Container cargo
Bulk cargo
General cargo
Liquid cargo
RoRo cargo
Ferry
Cruise
Superyachts
Walk-to-work
Oil & Gas
Renewables
Research
Fishery
Aquaculture
Mining
Floating structures
Naval & Military
Supplies Logistics
Naval & Military
Operations Support
Ship-to-ship
transfer
Lifecycle Services
Picture: Statoil
~3/4 of sales ~1/4 of sales
Services and solutions for Merchant and Offshore vessels
Hatch covers, container lashings
CranesRoRo access
equipmentPort and terminal
solutionsMarine
selfunloadersOffshore load
handling
Deck machinery Steering gear Mooring systems Offloading systemsBow loading
systemsFishery and
research
MEUR Q3/18 Q3/17 Change
Orders
received
141 139 +2%
Order book 513 511 +0%
Sales 130 114 +14%
Operating
profit*
0.3 2.9 -89%
Operating
profit margin*
0.2% 2.5% -231bps
Orders received increased by 2%
2017 comparitive period included a
large single order of approximately
EUR 25 million
Service orders +8%
Sales increased +14%
Service sales +5%
Operating profit* decreased due to:
M&A and integration related costs of
approximately EUR 1.5 million
Low capacity utilisation in certain
product areas
Orders received increased slightly in Q3
*) Excluding restructuring costsYear 2017 figures have been restated according to IFRS 15
MEUR Q3 2018 LTM**
Orders received 521
Order book 513
Sales 530
Operating profit* 4.3
Operating profit margin* 0.8%
Personnel (Q3/18 end) 1,884
Q3 LTM figures
Geographical
split of sales**
Sales mix**
AMER
12% EMEA
40%
APAC
49%
Cargo
handling
25%
RoRo
11%
Advanced
Offshore
Solutions***
25%
Services
39%
* Excluding restructuring costs
** LTM = Last 12 months (Q4 2017 – Q3 2018)
*** Including Rapp Marine Group figures, consolidated from the beginning of February 2018
Reduced full-time equivalents by 170
Operations reorganised
Savings of EUR 8 million to end Q3/2018;
all planned actions completed
Continued focus on growing service revenues
through aftermarket capture and new offerings
Low market environment sustained for longer
than industry-authority expectation
Actions taken to safeguard profitability and will
potentially take further action
Actions being taken to return operating profit to growth
Operating profit* margin
*Excluding restructuring costs
Year 2017 figures have been restated according to IFRS 15
1,034
1,139
778
571530
53.9
30.1
17.9
10.6
4.3
0
10
20
30
40
50
60
0
200
400
600
800
1,000
1,200
2014 2015 2016 2017 Q3/18 LTM
Sales (lhs) Operating profit** (rhs)
MEUR MEUR5.2%2.6%
2.3%
1.9%0.8%
Markets returning to growth but at a cautious pace
Source: Clarksons, September 2018
0
100
200
300
400
500
600
700
800
900
1,000
Avg
. 07
-17
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
No of units
Long term contracting 2015-2024Mobile offshore units
Forecast
0
500
1,000
1,500
2,000
2,500
Avg
. 96
-17
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
No of ships
Long term contracting 2015-2024Merchant ships > 2,000 gt
Forecast
Annual average 1996-2017:
1760 vessels
Annual average 2007-2017:
560 units
Markets returning to growth but at a cautious pace
Seaborne trade forecast
to grow +3.8% pa
between 2018-2023
Container and dry bulk
trades growing fastest
Impact of 2020 low
sulphur regulations on
non-compliant vessels
Oil price >US$75/bbl with
material reduction in
offshore project costs
Offshore E&P spend
forecast to increase by
10% in 2019
Source: UNCTAD Source: UNCTAD
Source: Pareto
Andy Brown, Shell’s Head of Exploration & Production says
that energy industry sentiment has “flipped” back from US
shale to deepwater
The industry has achieved fundamental cost reduction and
boosted deepwater productivity through advanced
technology and using existing infrastructure more efficiently
As a result, some projects which previously required high
crude oil prices to be profitable are seeing a ‘transformation’,
with significantly more cash flow potential than US shale
Offshore market slowly coming back
Source: Financial Times, August 2018
Market trends imply a ‘new normal’ where strong relationships,
efficiency and lifecycle value-added are critical for success
New normal –
lower for longer
Value chain
integration
Shift to
Asia and
commoditisation
Disruptive business
models and
digitalisation
Value chain integration
Overcapacity &
consolidation
Our customers expect and require us to be knowledgeable,
competitive and responsive
Easy to do
business with
Responsive,
reliable, global
service & support
Help in complying
with sustainability
requirements
‘Good enough’,
competitively
priced products
Comprehensive
understanding of
customer business,
throughout lifecycle
Developing
intelligent solutions
that fully meet
customer needs
Three generic ship types envisaged to coexist:
● Specification driven by lifecycle earning
potential with optimal power, propulsion
and mission critical system configuration
● Automated, autonomous or remotely
controlled operation
● Maritime capabilities and skills moved
from onboard to land based centre
● Driven by owner and shipbuilder need for
cost and production efficiency
● Standardised designs with potentially
shorter lifecycle
● Performance optimised power, propulsion
and cargo handling systems
● Automation of hazardous operations
● Bespoke with each design slightly different
● Low capex and ‘good enough’ preferred
● Supports ‘one-off’ newbuilding projects
Prototype Standardised Intelligent
Strategic focus
and priorities
By 2021 MacGregor will be…
The preferred partner creating highest
lifecycle value for owners and operators
The preferred provider of lowest total
cost for shipyards
The leader in intelligent maritime cargo and load handling
Transforming from being product centric to customer centric, with
a greater balance between equipment, services and solutions
Solutions Solutions
Equipment
ServiceAftersales
Intelligent
cargo
and load
handling
Services
EquipmentEquipment
Past Current Future
Continuing focus on cargo and load handling - expanding from
equipment and services to intelligent solutions and into new
market segments
Offshore
renewables
RoRo
ports &
terminals
Naval
logistics &
operations
Fishery,
research &
deep sea
mining
Offshore
oil & gas
Merchant
cargo and
passenger
Growing
adjacencies -
fish farming,
aquaculture
Equipment
Services
Solutions
Software
Next level
performance
Grow in intelligent
services
Understand –
Care – Serve
Build on
customer centricity
Enhance
way of working
Fit for growth
Engage and
empower people
Collaborate –
Learn – Inspire
Four must-win battles during 2019 - 2021 aligned to Cargotec
must-win battles
Photo: Carnival Maritime GmbH
Digitally enhancing our services, focused on
increasing industry and customer productivity
and efficiency
MacGregor Smart
Automate for improved
efficiency and safety
Optimise your assets and operational
performance
Safeguard your cargo, operations and people
Predict
Detect conditions and predict
the future for improved reliability
PORTFOLIO
Next level performanceCUSTOMER PROMISE
Safeguard Optimise Automate
Calculation tools and analysis determine which design concept will
deliver the highest earning potential for the ship’s cargo profile
Optimal cargo system designed and delivered
Supported in operation to achieve calculated efficiency gains
94 containership upgrades (EUR 32m) completed for multi-national
owners in Chinese and South Korean yards over the past 3 years
Cargo Boost: increasing payload capacity, earning potential and safety
Breakbulk Optimiser - increasing operational efficacy
Increases earning potential
Improves asset utilisation rates
Monitors cargo stowage performance indicators
Reduces complex planning processes
Improves information transparency
Safer, more efficient discharging cranes for bulk carriers
Solution drivers:
New revenue earning models & cost efficiency
Safety
Sustainability
Customer benefits:
Safer, more efficient operation
Driverless operation - automatic cargo unloading
Improved operator working conditions
3D printing to reduce spare parts costs and improve availability
■ Complex geometries
■ On demand production
■ Customization and “long tail”
■ Waste reduction
Produce 3D objects layer-by-layer
Advantages
■ Production speed
■ Price and economies of scale
■ Size constrains
■ Limited materials
Disadvantages
Potential for the marine industry
Digital
Warehouse
Shipping costs of replacement gaskets form Rotterdam to
Singapore
Shipping $85 / Part $0.9
Shipping $129 / Part $0.9
Shipping $0 / Part $1.8
Future vision: Send files - not parts
Printability:
today 10-20%
in 5 year ~30%
>10 year >50%
of MacGregor
(spare) parts
3D CADModel
.STLFile
SlicingSoftware
Layer Slices & Tool Path
AM Process
3DObject
3D printing via Fused Deposition Modelling (FDM)
Strengthening presence in Asia
124
6354
6773
190
CN* JP KR Rest APAC AMER EMEA
22%
11%
9%
12%
13%
33%
2017
REVENUE
ASIA 54%
Singapore is a strong, globally significant hub investing to further deepen the
maritime cluster, advance digital capabilities and develop a multi-skilled workforce
MacGregor has been present in Singapore since 1974 and currently employs 111
personnel in regional sales, service and support roles
Global Head Office moved to Singapore in November 2017 to further strengthen
and expand presence in Singapore and Asia:
Supports strategic intent to be closer to customers
More than 80% of world shipbulding takes place in Asia
Growing ship owning community
MacGregor Head Office established in Singapore
Singapore – the leading maritime capital
Source: Clarkson
34%
31%
20%
7.5%
7.5%
36%
28%
20%
10%
6%
14%7%
11%
29% 41%
43%
44%27%
32%
8%
23%
11%
5% 3% 3%
Nbr of Ships598 ships
Value$39.8b
CGT17.9m
Builder country split YTD 1st SEP 2018
Japan Korea China Europe Others
Estimated share of deliveries by major yard countries/areas, CGT
China and Korea competing for No.1 shipbuilder position
Korea remains a key player focused on large and high-end ships
Korea Ocean Business Corporation launched support in July 2018
Invest in new ships, provides guarantees, purchase-recharter used ships etc.
Support newbuild of 200 vessels for domestic shipping co over next 3 years.
Fully empowered MacGregor organisation established in China
China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC) are the two major state-owned shipbuilding companies
MacGregor opened its first joint venture with CSSC in April 2018: CSSC Nanjing Luzhou MacGregor Machinery Co. Ltd.
Further cooperation potential in cargo securing systems and offshore capabilities being considered
TTS has a strong position with both CSSC and CSIC through three strategic joint ventures
Strengthening our position in China
TTS acquisition update
Acquisition of TTS marine and offshore business
Employs 900 people
Sales approximately EUR 211
million in 2017*
Services 26% of revenues
Service growth potential
Strengthening MacGregor’s
position in China
Based on preliminary estimates,
potential cost synergies are
estimated to be around
EUR 30-35 million annually
Acquired businesses represent
approximately 90% of total TTS
Group sales
Enterprise value
EUR 87 million
The acquisition is subject to
regulatory approval from
competition authorities
Strategic rationale Businesses being acquired Acquisition
*TTS business financial figures are calculated based on full consolidation, but their actual impact on Cargotec's
financials is subject to applied post-acquisition consolidation method of the joint ventures included in the acquisition.
TTS acquisition timeline
February 8th
Asset Sale Agreement signed
March 12th
TTS shareholder approval
May Regulatory filings
submitted
Estimated
transaction
completion
May - Sept Regulatory responses
and information requests
Q4Regulatory approval
expected in all
jurisdictions
In summary
MacGregor is leading the development of intelligent
maritime cargo and load handling
Successfully managing costs with actions taken to
safeguard profitability, and will potentially take further action
Merchant and Offshore markets are recovering cautiously
Head Office in Singapore strengthens presence closer to
Asian customers
TTS acquisition supports future growth and profit
improvement potential
MacGregor appendix
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Avg
. 96-
17
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
Contracting history and forecast September 2018No. of ships, Merchant ship types > 2000 gt, excl ofs and misc
Tanker LNG/LPG Bulker Container MPP/GC RoRo/PCC Cruise
Merchant ships: Contracting forecast by shiptype (no of ships)Merchant ship types > 2000 gt, base case
Source: Clarksons September 2018
historical avg
1996-2017:
1761 vessels
0
500
1,000
1,500
2,000
2,500
Avg
. 9
6-1
7
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
202
5
202
6
202
7
Deliveries history and forecast September 2018No. of ships, Merchant ship types > 2000 gt, excl ofs and misc
Tanker LNG/LPG Bulker Container MPP/GC RoRo/PCC Cruise
Source: Clarksons September 2018
Merchant ships: Deliveries forecast by shiptype (no of ships)Merchant ship types > 2000 gt, base case
historical avg
1996-2017:
1562 vessels
Offshore mobile units: Contracting forecast by shiptype (number of units)
Source: Clarksons September 2018
0
100
200
300
400
500
600
700
800
Avg
. 0
7-1
7
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
Contracting history and forecast 2015 - 2024, September 2018No. of units, Mobile offshore units
Survey Mobile drilling Construction
historical avg
2007-2017
560 units
Offshore mobile units: Deliveries forecast by shiptype (no of units)
Source: Clarksons September 2018
0
100
200
300
400
500
600
700
800H
ist.
ave
rag
e2
00
7-2
01
7
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
Delivery history and forecast 2015 - 2024, September 2018No. of units, Mobile offshore units
Survey Mobile drilling Construction
historical avg
2007-2017
579 units
Shipbuilding –Contractingships >2000 gt/dwt
Contracting Volumes 2009-2017no. of ships
Estimated newbuilding investment
$bn
Source: Clarksons June 2018
Shipbuilding capacity and utilisation scenario
Source: Clarksons Research September 2018
Markets recovering slowly
Wea
ken
ing
ma
rke
tW
ea
k m
ark
et
Str
on
g m
ark
et
Reco
ve
rin
g m
ark
et
Crude tankers
Dry Bulk
Containers
Offshore
Chemical/Specialised Tankers
LNG
Multipurpose vessels
Car Carriers
Product tankers
LPG Carriers
RoRo/RoPax
Shipping cycle positions; freight/earnings cyclesindicative, timeline of each cycle not defined and varies
Cruise
Source: internal & Clarksons September 2018
Dry cargo
Oil tanker
Gas carrier
Offshore
Cruise
Although forward-looking statements contained in this presentation are based upon what
management of the company believes are reasonable assumptions, there can be no
assurance that forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements. These
statements are not guarantees of future performance and undue reliance should not be placed
on them. The company undertakes no obligation to update forward-looking statements if
circumstances or management’s estimates or opinions should change except as required by
applicable securities laws.
All the discussion topics presented during the session and in the attached material are still in
the planning phase. The final impact on the personnel, for example on the duties of the
existing employees, will be specified only after the legal requirements of each affected
function/ country have been fulfilled in full, including possible informing and/or negotiation
obligations in each function / country.
Disclaimer
